Question: es Foundation, Incorporated, is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan 1, the

es Foundation, Incorporated, is comparing two different capital structures, an all-equity plan

es Foundation, Incorporated, is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan 1, the company would have 205,000 shares of stock outstanding. Under Plan II, there would be 155,000 shares of stock outstanding and $2.17 million in debt outstanding. The interest rate on the debt is 6 percent, and there are no taxes. a. Use M&M Proposition I to find the price per share. Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What is the value of the firm under each of the two proposed plans? Note: Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32. a. Share price b. All-equity firm value. Levered plan firm value

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